Monday, October 18, 2010

Ontario Employment Law: More on Reasonable Notice

Slater v. Sandwell Incorporated (1994) is an important Ontario employment law decision with respect to the question of reasonable notice in a wrongful dismissal case.

As I have stated in a previous post, even though an employer is entitled to terminate a non-unionized employee under an indefinite contract of employment it must normally provide him or her with reasonable notice of the termination or pay in lieu thereof.

In order to calculate the period of reasonable notice, most courts start with the factors identified in Bardal v. Global Mail (1960), 24 D.L.R. (2d) 140 (Ont. H.C.) – the character of employment; length of service; age of the employee; and ability to find similar employment.

In Slater, the Court stresses that an "unfavourable economic climate" is also a factor to be considered but whose presence does not necessarily mean a lower notice period for the employee:

I agree with Justice Ferguson in his recent decision in Garvin v. Rockwell International of Canada Ltd. (1993), 50 C.C.E.L. 295 (Ont. Gen. Div.) in which he concludes that Bohemier, supra, does not stand for the proposition that the notice period should be reduced in adverse economic times. It is simply one factor in the overall balancing process necessary in the acknowledgment of the principles of good faith and fairness as it also becomes a factor in considering an employee’s ability to find other employment.

This is even the case where the employer can be shown to have experienced economic hardship in dealing with a recession.

Also, of note, the Court states that in assessing the period of notice the intention of the parties may be an important variable to be considered in addition to the Bardal factors:

In my opinion, in looking at relationship type contracts such as contracts of employment, it is incumbent on the court to examine the expectations of the parties and risks they assumed throughout the evolution of the relationship in order to determine the nature of the agreement that was breached. This will necessitate an analysis of the facts of each case not only in accordance with the criteria set out by Justice McRuer in Bardal but also an examination of the contractual relationship itself at the time of termination. At that point in time, what can be fairly said of the risks that each party to that relationship was then assuming?

Most courts give this factor a marginal role in the analysis, if one at all. Ontario's courts, however, recognize that a significant power imbalance frequently exists between employers and most employees and that the intention of the parties is not always readily discernible with respect to notice entitlements.

Perhaps that is where the attractiveness of the Bardal analysis lies. Bardal brings predictability and objectiveness to the analysis. This would most certainly disappear if intention of the parties as to notice was a more dominant factor.

- Robert Tanha, Toronto
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